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1 Report 15-4 May 2015 Non-Emergency Medical Transportation Department of Health Services Legislative Audit Bureau

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3 Report 15-4 May 2015 Non-Emergency Medical Transportation Department of Health Services Joint Legislative Audit Committee Members Senate Members: Robert Cowles, Co-chairperson Mary Lazich Alberta Darling Kathleen Vinehout Janet Bewley Assembly Members: Samantha Kerkman, Co-chairperson John Macco John Nygren Melissa Sargent Terese Berceau

4 Report 15-4 May 2015 LEGISLATIVE AUDIT BUREAU State Auditor Joe Chrisman Special Assistant Anne Sappenfield Deputy State Auditor for Program Evaluation Paul Stuiber Financial Audit Director Sherry Haakenson Supervisor Georges Tippens Legislative Analysts Laura Brauer Dan Kleinmaier Maria Toniolo Paul Waldhart Publications and Design Coordinator Susan Skowronski The Bureau is a nonpartisan legislative service agency responsible for conducting financial and program evaluation audits of state agencies. The Bureau s purpose is to provide assurance to the Legislature that financial transactions and management decisions are made effectively, efficiently, and in compliance with state law and that state agencies carry out the policies of the Legislature and the Governor. Audit Bureau reports typically contain reviews of financial transactions, analyses of agency performance or public policy issues, conclusions regarding the causes of problems found, and recommendations for improvement. Reports are submitted to the Joint Legislative Audit Committee and made available to other committees of the Legislature and to the public. The Audit Committee may arrange public hearings on the issues identified in a report and may introduce legislation in response to the audit recommendations. However, the findings, conclusions, and recommendations in the report are those of the Legislative Audit Bureau. The Bureau accepts confidential tips about fraud, waste, and mismanagement in any Wisconsin state agency or program through its hotline at FRAUD-17. For more information, visit Contact the Bureau at 22 East Mifflin Street, Suite 500, Madison, Wisconsin 53703; or (608)

5 CONTENTS Letter of Transmittal 1 Report Highlights 3 Introduction 9 Eligible Recipients and Scope of NEMT Services 10 History of NEMT Management 13 Variation in Transportation Policies and Procedures 15 Use of Transportation Brokers in Other States 17 Expenditures for NEMT Services 19 Funding NEMT Services 19 Estimating NEMT Expenditures 20 Payments to Transportation Providers 23 High-Cost Recipients 26 Other Transportation Services 28 Oversight of NEMT Services 31 Oversight of Transportation Broker Operations 31 Call Center Operations Standards 32 Oversight of Transportation Providers 35 Requirements for Transportation Providers, Drivers, and Vehicles 35 Disciplinary and Corrective Actions 38 Additional Oversight Mechanisms 40 Regulation of Specialized Medical Vehicle Providers 41 Complaints about NEMT Services 43 Complaints Received by NEMT Managers 43 Complaints Received by the Legislative Audit Bureau 53 Concerns Raised by Transportation Providers 55 Satisfaction with NEMT Services 59 Assessing Recipient Satisfaction 59 Assessing Transportation Provider Satisfaction with NEMT Management 67 Improving the Provision of NEMT Services 73 Issues with the Provision of NEMT Services 73

6 Appendix Department of Health Services Regions Response From the Department of Health Services

7 May 12, 2015 Senator Robert Cowles and Representative Samantha Kerkman, Co-chairpersons Joint Legislative Audit Committee State Capitol Madison, Wisconsin Dear Senator Cowles and Representative Kerkman: As directed by the Joint Legislative Audit Committee, we have completed a review of the provision of non-emergency medical transportation (NEMT) services to Medical Assistance recipients. The Medical Assistance program is administered by the Department of Health Services (DHS), which in fiscal year spent $56.1 million in state and federal funds to provide NEMT services to those Medical Assistance recipients who did not receive long-term care services. Since September 2012, NEMT services have been managed statewide by a transportation broker, which is a private vendor hired by DHS to manage the provision of NEMT services. From August 2013 through June 2014, Medical Transportation Management (MTM), Inc., the current transportation broker, provided 2.3 million trips to approximately 69,300 Medical Assistance recipients and paid $39.8 million to transportation providers. From July 2010 through January 2015, we received 386 NEMT-related complaints, mostly through our Fraud, Waste, and Mismanagement Hotline. Common complaints we received, as well as those received by MTM, related to drivers not arriving to transport recipients or arriving late to take them to their appointments. From August 2013 through June 2014, we found 4,154 instances in which transportation providers did not arrive to provide a scheduled trip and 55,320 instances in which they arrived more than 15 minutes late to take recipients to their appointments. To further inform our review, we conducted an independent survey of 5,000 randomly selected Medical Assistance recipients who received at least one trip arranged by MTM from January through June We also surveyed 311 transportation providers with which MTM had entered into agreements to provide transportation services. We include recommendations for DHS to improve its oversight of the transportation broker, including by establishing new performance standards; to change its practice of certifying specialized medical vehicles in order to comply with state statutes; and to consider how placement and utilization of new drug treatment programs may help to limit future NEMT costs. We appreciate the courtesy and cooperation extended to us by DHS, MTM, counties, transportation providers, health care providers, Medical Assistance recipients, and the other individuals and groups we contacted to complete our work. A response from DHS follows the appendix. Respectfully submitted, Joe Chrisman State Auditor JC/PS/ss

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9 Report Highlights From August 2013 through June 2014, MTM provided 2.3 million trips to approximately 69,300 Medical Assistance recipients. Data on NEMT expenditures are incomplete because of limitations in how they were collected and reported before FY From July 2010 through January 2015, the Legislative Audit Bureau received a total of 386 complaints regarding NEMT services. We recommend DHS take steps to reduce the extent to which transportation providers fail to arrive or arrive late for scheduled trips. The Department of Health Services (DHS) administers the State s Medical Assistance program, which is also known as Medicaid. The program uses state and federal revenue to fund health care-related services, which include non-emergency medical transportation (NEMT) services for individuals with low and moderate incomes. Public transportation, taxis, and specially equipped vans with ramps or lifts are used to take recipients to and from covered Medical Assistance services when a recipient has no means of transportation or needs financial help to cover transportation costs. In fiscal year (FY) , DHS spent $56.1 million in state and federal funds to provide NEMT services to those Medical Assistance recipients who did not receive long-term care services. Concerns have been raised about the dependability, quality, and cost of NEMT since DHS began contracting with private vendors, known as transportation brokers, to coordinate the statewide provision of NEMT services in July Therefore, at the request of the Joint Legislative Audit Committee, we reviewed: changes in the administration of NEMT services over time; trends in expenditures and variations in the provision of services; program oversight; recipient and provider complaints; 3

10 4 REPORT HIGHLIGHTS the level of satisfaction with the management and provision of NEMT services; and areas in which NEMT services can be improved. Expenditures for NEMT Services We compiled the best information available on NEMT expenditures from FY through FY However, these data are incomplete and do not always reflect actual costs, largely because of limitations in how data were collected and reported before FY We estimate that NEMT expenditures increased from $44.4 million in FY to $56.1 million in FY for those Medical Assistance recipients who did not receive long-term care services. From August 2013 through June 2014, Medical Transportation Management (MTM), Inc., a transportation broker with which DHS has contracted, provided 2.3 million trips to approximately 69,300 Medical Assistance recipients and paid $39.8 million to transportation providers. A trip is generally defined as travel from a recipient s home to the business, clinic, or hospital where a service covered by Medical Assistance will be provided, or travel from the health care provider back to the recipient s home. Oversight of NEMT Services DHS included oversight provisions in its contract with MTM, such as ensuring callers speak to a customer service representative within an average of four minutes. In addition, DHS requires MTM to oversee transportation providers, including screening and credentialing drivers and their vehicles and providing for disciplinary and corrective actions in instances of transportation provider noncompliance. To monitor compliance with these requirements, MTM collects documentation from transportation providers, ensures drivers are subject to drug tests, and conducts annual inspections of providers vehicles. MTM may assess liquidated damages against transportation providers under certain circumstances. We found that MTM made 439 assessments against 85 transportation providers totaling $10,055 from August 2013 through June In November 2014, DHS implemented a corrective action plan for MTM that remained in force through January It required MTM to undertake several corrective measures to ensure callers would be on hold for no more than four minutes, on average.

11 REPORT HIGHLIGHTS 5 Complaints about NEMT Services MTM is required under its contract with DHS to develop a formal written complaint process, provide a telephone line that is always staffed to receive complaints, and provide a website through which complaints may be submitted. Under the terms of its contract with DHS, at least 99.7 percent of the trips MTM provides are to be without a substantiated complaint. However, we found that MTM met the complaint-free standard during only three months from August 2013 through June In addition, we found that MTM did not send letters notifying complainants when it was going to exceed 30 business days to resolve their complaints. Approximately one-fourth of the 9,107 complaints that MTM substantiated from August 2013 through June 2014 involved drivers that never arrived for scheduled trips. Some recipients indicated their health care providers had discontinued seeing them because they missed too many appointments. From July 2010 through January 2015, we also received a total of 386 complaints regarding NEMT services, and we were able to substantiate 65 complaints (16.8 percent). Common complaints we received, as well as those received by MTM, related to drivers not arriving to transport recipients or arriving late to take them to their appointments. Satisfaction with NEMT Services We conducted a survey of 5,000 randomly selected Medical Assistance recipients who received at least one trip arranged by MTM from January through June 2014, excluding those whose services were entirely limited to public transportation or mileage reimbursement. Over 40 percent of respondents indicated they had experienced instances in which they missed or had to reschedule their appointments because drivers arrived more than 15 minutes late to pick them up or did not arrive at all. In addition, 56.8 percent of respondents indicated they or their children were picked up more than 15 minutes late for a return trip home, and 26.3 percent indicated they or their children were never picked up for a return trip home. However, 87.0 percent of respondents indicated that, overall, they were either satisfied or very satisfied with the NEMT services they received through MTM. We also conducted a survey of 311 transportation providers. More than one-half of all respondents indicated dissatisfaction with the trip scheduling process, trip volume, and the amount of compensation provided.

12 6 REPORT HIGHLIGHTS Improving the Provision of NEMT Services We found that from August 2013 through June 2014, MTM was unable to schedule 942 trips for recipients because no vehicle was available, including at least 164 trips in which recipients had called three or more business days in advance of their appointments. Beginning in February 2014, DHS required MTM to follow provisions of a corrective action plan to address instances in which no vehicles were available to provide trips. In January 2015, DHS assessed MTM $25,500 in liquidated damages based on the frequency with which no vehicle was available to provide trips in September However, DHS did not impose liquidated damages on MTM when transportation providers failed to arrive to transport recipients. From August 2013 through June 2014, we found 4,154 instances in which a transportation provider did not arrive to transport a recipient to an appointment or to provide a ride home, including 2,026 trips (48.8 percent) that were scheduled three or more business days in advance. From August 2013 through June 2014, 5.8 percent of recipients who received trips experienced at least one instance of a transportation provider failing to arrive for a scheduled trip. Table 1 shows the number of instances in which providers failed to arrive to transport recipients. Table 1 Instances in Which Transportation Providers Failed to Arrive for Scheduled Trips August 2013 through June 2014 Number of Instances Recipients Affected 1 2, Excludes 102 recipients who scheduled a trip but never received one because transportation providers failed to arrive.

13 REPORT HIGHLIGHTS 7 Transportation providers reported arriving more than 15 minutes late for 55,320 (8.7 percent) of the trips they provided from August 2013 through June 2014 to recipient appointments. Of these trips, 20.3 percent resulted in the recipients being more than 15 minutes late for their appointments. Recommendations We include recommendations for DHS to: consider developing additional performance standards related to caller hold times and abandoned calls (p. 34); discontinue certifying specialized medical vehicle (SMV) providers whose vehicles are not inspected under state statutes and alter its policies accordingly (p. 42); enforce contract provisions requiring MTM to provide every complainant with an update of the review being conducted within 10 business days (p. 45); amend its contract with MTM to formally establish the additional 14 business days it now permits for complaint review and notification (p. 49); amend its contract with MTM to require MTM to notify complainants by mail when it will take longer than 30 business days to review and respond to a complaint (p. 49); establish standards for the number or percentage of transportation provider no-shows that will be permitted each month (p. 81) and for the number or percentage of scheduled trips for which transportation providers arrive more than 15 minutes late that will be permitted each month (p. 81); and develop a corrective action plan that requires MTM to meet the new standards and report weekly to DHS on transportation provider no-shows and late arrivals (p. 81).

14 8 REPORT HIGHLIGHTS We also include recommendations for DHS to report to the Joint Legislative Audit Committee by December 1, 2015, on: its implementation of opioid treatment programs and the extent to which they may help reduce future NEMT costs (p. 28); the effectiveness of its corrective action plan for MTM in addressing caller hold times and the development of additional standards for hold times and abandoned calls (p. 34); its efforts to update SMV policies (p. 42); and the results of its efforts to establish standards for transportation provider no-shows and late arrivals, including the extent to which both no-shows and late arrivals have been reduced (p. 81).

15 Eligible Recipients and Scope of NEMT Services History of NEMT Management Variation in Transportation Policies and Procedures Use of Transportation Brokers in Other States Introduction Federal regulations require states to ensure necessary transportation for recipients to and from services covered by Medical Assistance. Since 1965, states and the federal government have funded health care services for certain low-income individuals through the federal Medical Assistance program. The range of health care benefits covered by the Medical Assistance program is comprehensive and includes both primary and long-term care services. Within parameters set by the federal government, states have flexibility in determining some of the services to be provided, as well as who is eligible to receive services based on income and asset levels. However, federal regulations require states to ensure necessary transportation for recipients to and from services covered by Medical Assistance. We reviewed the historical provision of NEMT services to Medical Assistance recipients who currently have these services provided through MTM, a transportation broker with which DHS has contracted to coordinate the provision of NEMT services statewide. Some NEMT services are provided to Medical Assistance recipients who are not served by a transportation broker, such as those elderly or disabled Medical Assistance recipients who receive long-term care through enrollment in Family Care, Family Care Partnership, or the Program of All-Inclusive Care for the Elderly (PACE), as well as those individuals covered by Medical Assistance who resided in nursing homes. Our review does not include transportation services provided to these individuals. To be eligible for the Medical Assistance program, applicants must meet certain nonfinancial requirements. These include being a United States citizen or a qualified alien and a Wisconsin resident and typically having or having applied for a Social Security number. 9

16 10 INTRODUCTION Applicants must also meet certain financial eligibility requirements, which vary based on the type of Medical Assistance benefits they are seeking or on their personal health conditions. For example, individuals who are elderly or disabled must typically have assets of no more than $2,000 and must meet certain monthly income limits, which can vary based on a variety of criteria, such as whether they are retired, unemployed, living with a spouse, or receiving federal Medicare benefits. For otherwise healthy children and adults who are seeking acute and primary care services, there is no asset limit, and applicants become eligible for Medical Assistance benefits based on income limits, which generally vary from 100 percent to 300 percent of the federal poverty level. As of February 2015, the annual income of a family of four at 100 percent of the federal poverty level was $24,250, or $2,021 per month. Eligible Recipients and Scope of NEMT Services The number of recipients eligible for NEMT services increased from an estimated 914,400 in June 2010 to 985,430 in June The number of Medical Assistance recipients who were eligible for those NEMT services included in our review increased from an estimated 914,400 in June 2010 to 985,430 in June 2014, as shown in Figure 1. The number of eligible recipients prior to July 2011 had to be estimated because of limitations in the available data. Figure 1 Number of Recipients Eligible for NEMT Services 1 1,000, , , , , , , , , ,000 0 June June June 2012 June 2013 June Excludes recipients of NEMT services who were not served by transportation brokers, counties, or health maintenance organizations (HMOs), such as elderly or disabled Medical Assistance recipients who received long-term care through enrollment in Family Care, Family Care Partnership, or the Program of All-Inclusive Care for the Elderly (PACE), as well as individuals covered by Medical Assistance who resided in nursing homes. 2 The number of eligible recipients prior to July 2011 is estimated.

17 INTRODUCTION 11 The increase in the number of NEMT-eligible recipients is likely the result of several factors. For example, the number of eligible recipients increased from June 2010 to June 2011, in part, because those enrolled in the BadgerCare Plus Benchmark Plan became eligible for NEMT services beginning in July In addition, the number of eligible recipients increased from June 2013 to June 2014 largely because childless adults became eligible for Medical Assistance coverage, including NEMT services, beginning in April Children are the largest group of NEMT-eligible recipients. As shown in Table 2, children are the largest group of NEMT-eligible recipients, followed by adults with children. Combined, these two groups represented 82.1 percent of all NEMT-eligible recipients in June 2010 and 71.7 percent in June The number of adults with children declined from an estimated 324,800 in June 2010 to 255,586 in June 2014 largely because the BadgerCare Plus Benchmark Plan was eliminated in April While some of those who had been covered by the BadgerCare Plus Benchmark Plan retained coverage under the current BadgerCare Plus plan, DHS estimated that approximately 56,000 adults and 3,000 children became ineligible for Medical Assistance, including NEMT services, because their family incomes exceeded the new limits of 100 percent of the federal poverty level for adults and 300 percent for most children. Table 2 Number of NEMT-Eligible Recipients, by Type 1 June 2010 June 2014 Recipient Type Number 2 Percentage Number Percentage Children 426, % 451, % Adults with Children 324, , Elderly or Disabled 163, , Childless Adults 3 103, Total 914, % 985, % 1 Excludes recipients of NEMT services who were not served by transportation brokers, counties, or HMOs, such as elderly or disabled Medical Assistance recipients who received long-term care through enrollment in Family Care, Family Care Partnership, or the Program of All-Inclusive Care for the Elderly (PACE), as well as those individuals covered by Medical Assistance who resided in nursing homes. 2 The number of recipients in June 2010 is estimated. 3 Childless adults first became eligible for NEMT services in April 2014.

18 12 INTRODUCTION NEMT services are provided through a range of transportation providers, such as taxi companies, public transportation providers, ambulance providers, and private individuals known as volunteer drivers who typically use their own vehicles to transport recipients and are generally reimbursed exclusively for their mileage. In addition, mileage reimbursement may be provided to Medical Assistance recipients who have access to an automobile but indicate they need help to pay fuel costs. Beginning in August 2013, DHS began requiring recipients to take a bus to their health care appointments if they are able to do so. Beginning in August 2013, DHS began requiring Medical Assistance recipients to take a bus to their covered Medical Assistance appointments if they live within one-half mile of a bus stop and are traveling to an appointment located within one-half mile of a bus stop, provided they are not: individuals unable to get to a bus stop or ride a bus as a result of a physical or mental health condition; parents or caregivers of children age four or younger who are traveling with those children to the children s appointment; children age 15 or younger who are traveling alone; or individuals age 70 or older who use a walker, crutches, or a cane. From August 2013 through June 2014, 70.2 percent of trips were provided by sedan, van, or taxi. Table 3 shows the types of trips MTM provided to Medical Assistance recipients from August 2013, when it assumed responsibility for providing trips as the transportation broker for Wisconsin s Medical Assistance program, through June 2014, which was the most recently completed month for which data were available at the time of our fieldwork. A total of 2.3 million trips were provided during this period to approximately 69,300 Medical Assistance recipients. Of these trips, 70.2 percent were provided by sedan, van, or taxi to recipients not requiring a specialized vehicle. A trip is generally defined as travel from a recipient s home to the business, clinic, or hospital where a service covered by Medical Assistance will be provided, or travel from the health care provider back to the recipient s home. A round trip, which includes travel to a covered service and back to the recipient s home is considered two trips because some recipients receive NEMT services only to or from an appointment.

19 INTRODUCTION 13 Table 3 Type of NEMT Trips Provided to Medical Assistance Recipients by MTM August 2013 through June 2014 Number of Trips 1 Percentage of Total Sedan, Van, or Taxi 2 1,649, % Mileage Reimbursement 398, Public Transportation 214, Wheelchair Vehicle 3 82, Ambulance 3, Total 2,348, % 1 A trip is generally defined as travel from a recipient s home to the business, clinic, or hospital where a service covered by Medical Assistance will be provided, or travel from the health care provider back to the recipient s home. 2 Includes transportation provided to recipients not requiring a specialized vehicle, including transportation provided by volunteer drivers. 3 Includes specialized vehicles designed to transport recipients in wheelchairs and stretchers. History of NEMT Management DHS has delegated responsibilities associated with managing NEMT services to various entities over time. DHS is responsible for administering the Medical Assistance program and overseeing the provision of NEMT services to all eligible recipients. However, DHS has delegated responsibilities associated with managing NEMT services to various entities over time, as shown in Figure 2. Except for recipients served by HMOs in Milwaukee County, before July 2011, DHS: delegated to counties responsibility for managing NEMT services provided by common carrier, which includes public transportation and transportation by sedan, van, or taxi for recipients not requiring specialized vehicles to meet their transportation needs; and managed NEMT services provided by SMVs for those recipients who required such transport. Beginning in February 2008, responsibility for managing both common carrier and SMV services for those Medical Assistance recipients in Milwaukee County who received services through an

20 14 INTRODUCTION Figure 2 Entities Managing NEMT for Medical Assistance Recipients Population Served July 2009 July 2011 August 2013 Statewide population except for recipients served by HMOs in the six southeast counties mentioned below Recipients served by HMOs in Kenosha, Ozaukee, Racine, Washington, and Waukesha counties DHS Counties DHS Counties LogistiCare LogistiCare HMOs HMOs September 2012 LogistiCare LogistiCare MTM MTM MTM MTM Recipients served by HMOs in Milwaukee County HMOs HMOs LogistiCare LogistiCare MTM MTM Types of Non-Emergency Medical Transportation Specialized Medical Vehicle (SMV) and Ambulance Common Carrier 1 and Mileage Reimbursement for Personal Vehicle 1 Includes public transportation and transportation by sedan, van, or taxi. HMO became the responsibility of the respective HMOs. These HMOs were initially paid by DHS on a fee-for-service basis. However, in January 2009, the cost of NEMT services was first incorporated into the capitated rates paid to HMOs serving recipients in Milwaukee County in an effort to limit expenditures. A capitated payment system involves paying a set amount per recipient per month, regardless of the extent to which services are utilized. Beginning in July 2011, HMO responsibilities for NEMT management were expanded to NEMT services provided by HMOs to Medical Assistance recipients in the counties of Kenosha, Ozaukee, Racine, Washington, and Waukesha. HMOs serving recipients in these five counties were paid by DHS on a fee-for-service basis for the NEMT services they provided. Beginning in July 2011, NEMT services for most Medical Assistance recipients not being served by HMOs in the six counties in southeastern Wisconsin began to be managed by LogistiCare Solutions (LogistiCare), LLC, which is a private vendor with which DHS contracted to act as a transportation broker for NEMT services. Its responsibilities included developing a transportation provider network, scheduling trips, paying transportation providers, and tracking and addressing complaints.

21 INTRODUCTION 15 DHS indicated the use of a transportation broker is intended to accomplish several goals, including: improving access to and the quality of NEMT services statewide; providing for the uniform application of NEMT policies across the state; reducing costs by ensuring travel is provided through the most economical mode of transportation; and reducing instances of fraud and abuse. In September 2012, LogistiCare became responsible for managing NEMT services statewide by assuming management of the NEMT services that had previously been the responsibility of HMOs serving recipients in Kenosha, Milwaukee, Ozaukee, Racine, Washington, and Waukesha counties. MTM assumed responsibility as the statewide transportation broker for NEMT services in August In August 2013, MTM, another private vendor with which DHS contracted, assumed responsibility as the statewide transportation broker for NEMT services after LogistiCare informed DHS that it wished to terminate its contracts. The three-year contract with MTM is in effect through July 2016, but the contract also provides for two one-year extensions upon mutual agreement of the two parties. If both extensions are agreed to and entered into, the contract would run through July It is generally thought that advantages of using a transportation broker that does not use its own vehicles to provide transportation are a lack of bias in provider selection and the increased likelihood that it will select the least costly transportation option. However, selection of the least costly transportation option can also become a detriment to the quality of service if adequate standards for transportation brokers are not developed and enforced. For example, some states have found that transportation brokers tend to hire small transportation providers that do not maintain their vehicles properly. Variation in Transportation Policies and Procedures We reviewed available information on the transportation policies of entities managing NEMT services and found significant variation in some areas. Some of the variation is a result of the type of transportation being overseen, while other variation is due to policies in a managing entity s contract with DHS, choices made by a managing entity, or contractual requirements. Table 4 shows the

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